President Hugo Chavez, saying he hopes to advance a socialist revolution, pledged Sunday that Venezuela's huge state oil company will try to lure businesses into a new model that spreads their profits among workers and the community.

Speaking on Chavez's weekly TV and radio program, "Hello, President," Oil Minister Rafael Ramirez said state-run Petroleos de Venezuela would offer loans and contracts to businesses that adopt a model he called "social production."

Chavez said such companies would fund social programs and share profits with their workers and would allocate part of their revenues to help form more such companies.

It appeared to be the first time that Chavez had spoken at length about the idea, though some aspects were still unclear. At one point he referred to the idea as a "collective" style of business, but he also insisted that they would remain private property.

The Web site of the oil company, known as PDVSA, said it planned to allocated US$100 million (Ђ85 million) to the plan.

Chavez, who often attacks U.S.-style capitalism and is a close ally of Cuba's communist leader Fidel Castro, said the new business model would stimulate development and lead the country toward "21st-century socialism."

"Capital itself is not bad," Chavez said. "What's bad is capitalism, ... when capital is concentrated in the hands of a few and is used to exploit the rest."

He said the new system is intended to break the "model of domination" by the United States which, "asks us to abandon our industrial policies, our development policies so that they can invade us with their products."

Soaring oil prices have swollen PDVSA's income and Chavez has earlier used some of that wealth to help build bridges with other Latin American nations by financing energy projects and by offering cheap credit for fuel.

Last week, Venezuela's Citgo Petroleum Company expanded the idea to the United States by offering cut-rate fuel to poor Americans, hospitals and homeless shelters.

Under Chavez, Venezuela has moved toward a greater state role in the economy, though the measures are vastly less sweeping than those adopted during the early years of Castro's Cuban revolution, which banned most private business.

Chavez's government has taken over tracts of land and expropriated businesses that it determined were underused or lacked ownership documents.

Critics alleged Chavez has trampled property rights. Chavez, however, said Sunday that he respects private property while asking that it serve the needs of the population at large.

"Twenty-first-century socialism does not deny the private sector _ it needs it, but as long as it's at the service of the country and its development," Chavez said.

Chavez was speaking in the western state of Zulia, about 500 kilometers (310 miles) from Caracas, at an exposition by state oil company of the so-called social production businesses, AP reported.
V.A.